On the one hand, the men and women We the People elected to high office continue to act like adolescent Dr. Evils–threatening to destroy the world economy if their petulant demands for ego assuagement are not met. The Koch Brothers and the Heritage Foundation realize, to their horror, that the monsters they have created might actually do something this crazy, resulting not only in the normal neglect of the poor, but even in devastation to the rich, which they never intended. So we now have a situation in which the GOP leadership is being told to decouple Obamacare from the debt limit (since they are not going to win), but because they’ve already gone this far in a losing struggle, they need something for their egos so they won’t look like total losers. And if their egos are not assuaged, they seriously propose to destroy the world economy. Sin truly makes people stupid, especially proud people–with which our Ruling Class abounds.

(And before you say something even more stupid, be aware that all Obamacare means to me is a monthly payout of hundreds of dollars I can’t afford in welfare to an insurance company. So don’t even start. Part of the absolute stupidity of the Thing that Used to be Conservatism is that it meets every critique with charges that the critic is a damn librul and closet Obama supporter. Conspiracy theories being history for stupid people, political ideologies that rely on conspiracy theories to explain why they lose are political ideologies for stupid people. Hence the enormous popularity of catering to idiots who fabricate and believe stupid crap when such idiotic conspiracy-mongering is easily and documentably falsifiable. Message: Fight smarter.)

If the world survives this week of absolutely juvenile and ego-driven brinksmanship, it will be because Mary hears the prayers of her children and intercedes for them with her Son, not because of the reckless fools we elected because it was the “realistic” thing to do. If it does not–if these complete and total idiots burn down the global economy because of their vain need to “save face”–our children will curse us and we will deserve it.

The purpose of the state is to serve the common good. Dynamiting the world’s economy because you don’t want to feel like a loser does not serve the common good. Duh.

“And before you say something even more stupid, be aware that all Obamacare means to me is a monthly payout of hundreds of dollars I can’t afford in welfare to an insurance company. ”

————————–
In being called the “Affordable Care Act”, it really meant “affordable” for the insurance companies.

If it really was concerned with making it affordable for the people, then it would have taken step to increase the number of and remove barriers to medical practitioners.

meunke

“You said it’s all circling the drain, the whole universe. Right?”… “Had to end sometime.”

Sean O

Spot on Mark.

We have had a great lack of public servants among our elected officials in DC & elsewhere. But these Southern Republicans & their ilk have set a new low for stupidity, arrogance & recklessness. They launched this hair-brained scheme to hold the US gov’t & possibly the world economy hostage. Now their egos won’t let them back down unless they can get “something”, something to save face & claim a partial victory. These arrogant clowns represent a new low in out political culture.

And yes, of course, OBAMACARE is a bad bill and just as likely to be a burden rather than a help to avg Americans. It was designed by the right-wing Corporatist Heritage Foundation. It WAS designed to serve the financial interests of the Insurance Industry & Big Pharma. Designing a better, cheaper, more efficient Healthcare system for the American people was NOT the goal, a safe secure profitable business plan for the future of Insurance giants and Drug manufacturers was. So silver lining, mission accomplished. Of course the Republicans have no plan to help people to get healthcare, but they will preserve your freedom to be priced out of medical services & die away from a hospital.

The lesson is just be healthy.

Stu

The lesson is, we shouldn’t be trying to fix this at the national level.

Too big to succeed.

peggy

I have no idea what Shea said. I have a grad degree in econ, practicing 20 years in public policy. As for “southern Republicans” cripes, Graham and McCain for starters are running like heck from this shutdown. The GOP establishment is not going to do anything about Ocare regrettably. But that was what Cruz and Lee wanted to get out of the shutdown. THe law is evil and will destroy many lives. It must be stopped.

chezami

However, since it is abundanttly clear it will not be stopped this way, even the Kochs are telling the GOP to drop it. So now we are down to “We demand some concession so we don’t look stupid or we will nuke the world.” People with that much juvenile ego should be nowhere near the levers of power.

The small government project is essentially saying that a long list of things including entire departments of the federal government are better handled either at other levels of government or privately. All of it is destructive to the country in the framework.

An offer to give over on a non-negotiable on the left but to ask for something from the rest of the long laundry list doesn’t seem to be anything more than classic political horse trading. The only thing irresponsible is that nobody seems to have updated the small government laundry list of things to stop doing federally lately but I don’t think that’s what you’re complaining about.

peggy

No, it was probably not going to get stopped, but the GOP should be standing firm for major concessions, such as 1 yr delay and end of HHS mandate. Yet, they cower upon reading WashPost & NYT headlines. Negotiating means to start with something you may not likely get, and wait for the other side to fold and at least give you 1/2 of what you want. The GOP was winning. Obama was freaked out enough to give a rambling incoherent presser. Once the GOP approves a budget, there’ll be NO CHANCE at all that Dems will listen and negotiate on Ocare. The GOP appears to be blowing it. The establishment keeps telling us to wait, wait, wait…not this time….but they really really want to end Ocare. Right. This is not the establishment’s fight. They aren’t happy about this at all.

KM

Thank you for saying this, Sean. I work in healthcare and I can attest to what is happening. Medicine is becoming more corporate because there are huge profits to be made by insurance companies, drug companies, and big hospitals run by highly-paid CEOs.

Where I live, one of the few hospitals in town is buying up doctors’ practices and monopolizing healthcare in the area, while recently laying off 10% of its workforce. Independent doctors I know are experiencing less referrals and revenues due to this increased monopolization of medicine. “Obamacare” isn’t socialized medicine. It’s really about corporate profits over patients brought to you by the collusion of government with large corporations. Our entire culture has been corrupted by greed.

kenofken

If any person or group outside of our government conspired to derail the economy and possessed the means to do that, they would be treated as terrorists and “all options would be on the table.” Team Six would be dumping some of the ringleader’s carcasses at sea about now. Just sayin. These idiots stand to do far more economic damage to us than 9/11 ever did, probably as much or more as the Wall Street crashes, and nobody thinks that’s a problem, if it has a one in a million chance of stopping Obamacare.

If they do succeed in sinking the ship, I hope I at least get to see the stupid, panicked look on their faces when they realize they’re also standing on it. ALL of their personal and business liquidity, the values of their savings and stock portfolios, their real estate, Medicare, all of the things that made them a cut above Obama’s “welfare bums”, all gone….

meunke

“These idiots stand to do far more economic damage to us than 9/11 ever
did, probably as much or more as the Wall Street crashes, and nobody
thinks that’s a problem, if it has a one in a million chance of stopping
Obamacare.”

– The damage is already done. It was done years back. It is terminal cancer at this point because we refused to go to chemo before it got too far. Now the only thing both parties are arguing about is how much morphine to pump in until the body finally shuts down.

The call is “We MUST get another credit card and max out the cash advance on it now or else we won’t be able to make this month’s interest-only mortgage payment and we may lose our house!!!” Lost in all this is the common sense idea that, if we have to sink further into enormous amounts of debt just to pay a monthly/yearly interest payment, then we are already past the point of no return.

But don’t worry. Regardless of what the media has told you, our decline will be less like a cut scene from Beyond Thunderdome and more of just a slow, grinding spiral into irrelevance.

Sean O

Republicans can make their case 24/7 once the govt is funded and default avoided. Nothing preventing them from working their tails off.

Let’s open up all the books and see where the money goes, who’s getting it. Let’s look at Revenues. Who’s paying & who’s not? Let’s do this all day everyday without risking default & economic chaos which will of course punish average Americans & the poor the worst.

Gov’t by stunts & hostage taking is not acceptable is a sane a decent society.

jaybird1951

Do you think that once Obama has all he has demanded, that he will be open to really substantial negotiations on the big stuff like entitlements and government waste? You are basically advocating that Congress give him carte blanche.

jroberts548

What world do you live in? In this one, Obama, negotiating with the Republicans in Congress, has already lowered entitlement spending and government spending overall. Did the sequester not happen in your universe? The budget for FY 2014 is already $110,000,000,000 lower than Paul Ryan initially asked for. What indications do you have that Obama isn’t open to substantial negotiations on entitlement spending?

Stu

And he has gone kicking and screaming all along and forced to comply through congressional leverage.

jroberts548

1. In return for the sequester, for the Bush/Obama tax cuts, and for various entitlement cuts (e.g., to SNAP), Obama has obtained in return nothing but short term continuing resolutions. That is, just about the only time he’s stuck to his guns has been on the PPACA, which is an entitlement program for insurers. I have no idea why either Obama’s critics or his supporters think he’s a liberal, unless they’re listening to his speeches and ignoring his actions.

2. But let’s, arguendo and with no evidence at all, that Obama has only given in to all but one of the GOP’s demands kicking and screaming. So what? He gave in kicking and screaming, without anyone being crazy enough to force a default or a government shut down. On everything but the PPACA, he gave in, whether he wanted to or not. Even if we pretend Obama is a liberal, I have no idea where jaybird1951 has gotten the idea that Obama is some sort of intransigent liberal, unwilling to make nearly all of the Bush tax cuts permanent or cut entitlement spending. He’s done so before, and no one had to shut the government down then.

Stu

I don’t totally disagree with you. I think he is Big Government/Big Business corporatist as much as any politician. But at the same time, I think keeping pressure on him is a good thing.

jroberts548

deleted, duplicative (after disqus appeared to eat a comment, I retyped substantially the same thing).

chezami

I want to live in a world where idiots do not burn down the global economy because they are in a snit about their affronted egos.

meunke

As would I. But in the end what we are arguing over is if it should burn down tomorrow or next week. This entire debate from either political party, will not change whether or not it does burn.

Sean O

Bingo

Sean O

A world of lots of noise and little real information. A world in which many participants are tuned out or impervious to factual information.

A world in which people believe what they want to believe despite the actual facts on the ground.

The magical world of modern America.

Sean O

If they are committed to exposing ALL forms of waste & corruption, they will get the people’s attention. Let’s see committees with outside parties audit all aspects of gov’t.

Despite all the raised voice GOOD, SOLID, HARD information on these matters is sorely lacking.

My sense is there is no real commitment to anything other than scoring points.

“Gov’t by stunts & hostage taking is not acceptable is a sane a decent society.”
– i think it’s perfect, actually. Mainly because we are NOT a sane society, as the links I’ve included show.

Sean O

Throwing the US economy & the world economy into chaos or potential chaos does NOT improve the opportunity to understand, discuss & develop a solution to our long term debt crisis.

And most people w/o the insulating effect of great wealth will suffer the consequences of defaulting & disrupting the world economy, an economy that is still quite precarious.

meunke

“Throwing the US economy & the world economy into chaos or potential
chaos does NOT improve the opportunity to understand, discuss &
develop a solution to our long term debt crisis. ”
– I would agree. I am not advocating chaos. What I have been saying is that, like it or not, the chaos is coming. It is coming because in order to put our house in order we have to, as a nation, do something that I personally hate doing just as an individual: making sacrifices. SERIOUS sacrifices.

Oh mark my words, the debt ceiling will be raised, then everyone in this comment thread will heave a sigh of relief… and promptly move on to something else.

Neither party wants things changed.

“And most people w/o the insulating effect of great wealth will suffer the consequences”
– But the people with great wealth are the ones calling the shots, and they are making out like bandits right now.

Sean O

Pretty much in agreement here.

NOTHING of any consequence will change in DC until we change/reform how we elect Congress & Presidents.

Right now they are essentially bought & paid for, & thus do the work of their owners/masters. Many elected officials are also captured by the status quo mentality/culture as they are usually from the wealthier & upper echelons of society to begin with.

And, And, And. We need the electorate to get serious & get informed which they are not. Perhaps 10% but more likely 5% of the population has a clear headed relatively unbiased understanding of what goes on with out gov’t and the wider world. Most people don’t vote, and most voters are content to be lied to and live in a fantasy world. Most voters want all the gov’t programs & services they like or need to remain & likely grow more generous, have their taxes cut, maintain a gargantuan military an have a balanced budget. Pain & cutting is required to get the budget under control. And more revenue will be required from the wealthy & corporations.

Who is telling this truth now? Nobody in DC or on Fox.

Stu

Isn’t the point (and past experience) that once the government is funded that there is no real concern to fix anything. Isn’t the point of the debt limit hike for us to reflect on our trajectory and take some action before we blow through the next one?

Sean O

So you are saying the Republicans aren’t really serious about reducing the deficit or national debt.

NO ONE is stopping them from making this case loudly & non-stop after default and all its costly & disruptive effects are avoided.

Stu

Historically, neither party has been serious for quite some time. The last time we had a REAL surplus was under Eisenhower.

I think many in Congress has been making this case loudly and non-stop for quite some time. It’s only when we hit these checkpoint that everyone seems to take note.

Sean O

Basically correct. Neither party is particularly concerned with large long term debts or year to year deficits. It was Dick Cheney who said, “Deficits don’t matter” & “Elections have consequences,” when justifying further tax cuts for the wealthy to a concerned & befuddled Sect of the Treasury Paul O’Neill.

That said the biggest debt reducer since 1980 was Clinton.

Still, don’t want to experience chaos of default just to allow a stupid, self defeating stunt by a gaggle of unserious Southern Republican clowns.

Stu

Clinton and GOP Congress were the biggest debt reducers BUT they had a booming tech economy to thank for it.

Obama gets as much blame as the GOP in this. As the President, he should be working with them. He won’t and that is a failure of leadership.

Obpoet

You mean Enron?

jroberts548

The ONLY reasons it’s bad for the government to take on too much debt is that our borrowing costs will increase, and our bondholders will find themselves holding less valuable bonds, with significant ecoonomic consequences. That’s exactly what happens if we fail to raise the debt ceiling and can’t pay our bondholders.

There’s functionally no difference between raising the debt ceiling infinitely and not raising at all.

We could pay all our debt immediately. Our debt is denominated in dollars, and we can print as many dollars as we want. The inflationary effects of that would actually be worse for the nation, our government, and the world than issuing more debt would be.

The U.S. government’s sovereign debt is in no meaningful way like your mortgage payment, house, or credit card. If the bank gives you an unsecured, nonrecourse loan for the value of your house at a negative interest rate, let me know, and then maybe you can draw a comparison.

Stu

“The ONLY reasons it’s bad for the government to take on too much debt is that our borrowing costs will increase, and our bondholders will find themselves holding less valuable bonds, with significant economic consequences. ”

———————————-
Which begs the question, why do we tie our money supply to borrowing?

jroberts548

1. It raises the question.

2. I’m actually not completely certain, but as near as I can tell, borrowing is less inflationary than printing. If someone wants to make the argument that we should print money or .dig up gold or do something else instead of borrowing, that’s fine. They can make that argument, and maybe they’ll be right. That’s an argument for replacing our treasury system altogether. That’s not an argument for default.

Stu

I don’t think anyone is advocating default. Even with the debt ceiling not being raised, action can be taken to not default. It will provide some challenges but it can be done.

But the reason I bring up the question is that we need to consider the system itself because it certainly isn’t working right now. And I’m not advocating the Gold Standard either. That too has issues. But other things could be done instead.

John Medaille has some ideas on that in his last book (Toward a Truly Free Market).

jroberts548

And even we look into those other options, we have a whole heap of notes that will come due over the next several decades. Pivoting to any non-borrowing based system will take time, and require some borrowing. Not raising the debt ceiling will raise borrowing costs.

That is, if you want us as a nation to consider these other systems, refusing to raise the debt ceiling has the perverse effect of making it more expensive to shift from borrowing to something else.

Stu

I’m not advocating that the debt ceiling shouldn’t be raised. I’m simply pointing out that it’s time to reconceptualize the system for the long term. You know, think past a four year election cycle.

meunke

“We could pay all our debt immediately. Our debt is denominated in dollars, and we can print as many dollars as we want.”
– That’s what’s going to happen anyway.

jroberts548

If the US just printed up $16 trillion, that would cause significant inflation. I hope that’s not going to be what happens anyway.

meunke

Since there are no cuts and no way to repay the debt, yes, it will be. Which as you point out, will be very bad.

Also lost in this discussion is the fact that interest rates are a ridiculous artificial lows. There WILL be pressure to push them up. If they move a bit, the effect on the debt will be enormous.

The thing to understand is that there IS NO HAPPY ENDING for us. For the ruling class that will soak us? Sure there will be. For the rest of us? No.

jroberts548

And you know what will push those interest rates up? NOT RAISING THE DEBT CEILING.

If you want the debt to increase to astronomical levels, don’t raise the debt ceiling. If you want to reign in the debt, raise the debt ceiling and then worry about appropriations.

And what do you mean no cuts? The budget is already $110,000,000,000 lower than the GOP asked for it to be for this year. Could we do more to reduce spending and raise revenue in order to reduce the deficit and then the debt? Yes. Will not raising the debt ceiling reduce the deficit or the debt? No, in fact, by making borrowing costs higher, it raises the debt.

meunke

You are still returning to the choice of do we burn today or tomorrow.

“If you want to reign in the debt, raise the debt ceiling and then worry about appropriations.”
– This is funny because it seems to show that you believe that our ruling class actually WILL do something. I recommend John Wright’s article that I linked below.

The left will never allow cut entitlements, the right will never allow cuts to the military. There will be no cuts because any cuts will result in economic pain in voters NOW, which translates into voters that will go into the voting booth angry in the next election. That can’t be allowed to happen.

We won’t take the chemo drugs to fight off the cancer because they make us vomit and feel horrible, but in the long run are necessary. Easier to just pump more morphine and ignore the pain, or rather, just hope someone else is in charge when the morphine no longer works.

jroberts548

“The left will never allow cut entitlements, the right will never allow cuts to the military”

The sequester happened just two years ago. There were cuts to entitlements and to the military. This happened less than two years ago. Unless there’s physically a problem with your brain, you remember it.

More to the point – the ONLY harm from the government taking on too much debt is that borrowing costs may go up. This is the same harm as if the government doesn’t take on more debt on Thursday. If you’re really concerned about burning today or tomorrow or later, then you should want the government to raise the debt ceiling now and get debt levels to a sustainable level. Borrowing costs becoming too high for the government to sell bonds is the only way for the US to experience meaningful, adverse debt-related consequences. That’s concretely what happens if we default, either because we have too much debt or because we refuse to take on more debt.

What, concretely, do you think happens if we take on too much debt? What, concretely and specifically, do you think will happen to make the US “burn,” either today or tomorrow?

meunke

Oh I remember that live action cartoon very well. I remember many other chicken littles also panicked that it was going to be the end of the economy as we know it if we allowed it to happen.

You must not have read or looked at the links I posted.

Further, how is a tiny cut, compared with a continuous growth in spending meaningful? Did you perhaps also pause to consider the coming unfunded liabilities?

I think you perhaps underestimate the amount that needs to be cut.

jroberts548

What, concretely, do you think happens if we take on too much debt? What, concretely and specifically, do you think will happen to make the US “burn,” either today or tomorrow?

meunke

Nothing much, not for a while still.

If the debt was just a certain, static amount that could be chipped away at, it would be a long, drawn out payback.

Our problem is that our current system REQUIRES an enormous, increase in our debt just to pay our bills. This means that we MUST have a larger and larger amount of input just to stay afloat, in the manner of a heroin addict requiring a larger and larger dose to get that high. Eventually, we will not be able to afford to pay. Will the government default? No, that would be honest. We will simply inflate as much as needed to ‘pay’ our debt, which destroys the value of money (soft default). For a while this will be further cushioned by the fact that the Dollar is the reserve currency. But if we start cranking up inflation that is necessary to get us out, that will eventually cease to be the case. We are already inflating our money supply to the tune of ~$80 billion every month in QE, which is the only thing keeping the market from falling right now.

jroberts548

1. How does not raising the debt ceiling avoid this?

2. If what you predict can’t be avoided, what’s the advantage to “defaulting” sooner rather than later?

3. Why not raise the debt ceiling as needed and worry about spending and the deficit when we pass spending bills, which the debt ceiling is not?

ETA: The third question is purely rhetorical, since that’s the only sane option an honest, reasonable person would choose.

meunke

1. It doesn’t. Neither will raising it. Neither matters, really.

2. Honesty? Less damage overall? If I know I’m going to go bankrupt, and I know that getting a personal loan from you will not stop that, but if I get you to give me that money I won’t pay it back in any meaningful way, how is it moral to demand that you ‘lend’ me that money?

3. Why not remove any ceiling on debt permanently and quit pretending we want an upper limit on what we spend? That’s effectively what we have been living under anyway. As for the second part, I have already pointed out that neither party will cut anything of note. Again, see what I linked to below. John Wright’s article is a very good explanation.

jroberts548

The debt ceiling isn’t a spending bill.

If I thought you were going bankrupt, I wouldn’t lend you money at a negative real interest rate without any security or the ability to collect from you against your will. Our lenders, who are in the same or better position to know about our government’s impending collapse as any voter, are pretty confident we’re not going to go bankrupt.

And the only reason not to go bankrupt is because you don’t want your lending costs to go up in the future.

Clare Krishan

Re: no longer works or the patient is no longer capable of metabolizing it? “Morphine is like a loaded gun which is so powerful that (it) can kill a patient by lowering their blood pressure and stopping the breathing.” Dr. Charles Phillips at http://seniors.kaiserpapers.org/hos.html

Currencies can suddenly become commercially unviable, ie no one wants them at any price discount (ie level of interest paid so I can have your cash now, the price I pay you to return it to you later). The problem is that the purchasing power of the money is declining, so that any principle being repaid is worth less than any gains earned via interest… leaking lending if you will. Expropriation by stealth seignorage. The only thing keeping it all propped up is that most other FIAT currencies are leaky lenders too, so worried savers save where they think the armies are strongest (ie civil unrest least likely). Egyptian oligarchs buy real estate in London, while Chinese ones buy up your local AMC cinemas. Our taxes / indebtedness pays for a system of governance that keeps their investments safe (including being bailed out if they own bank shares) with liberties protected by legislation that they deny their own citizens at home… cognitive dissonance anyone?

ganganelli

Mark, you have a lot of credibility as a straight shooter. It would be nice if you could explain how Obamacare actually works in practice a few months from now. I assume you have to buy insurance on the individual market now?

chezami

Why do you suppose I know anything about that?

ganganelli

Probably a bad assumption on my part but I figured since you were a writer, you didn’t have employer provided insurance.

If this is the case, it would be instructive for you to do a post sometime down the road to describe the pros and cons of your healthcare plan pre and post Obamacare.

chezami

I don’t. As I say, all it means to me is I pay a bunch of money in welfare to an insurance company.

ganganelli

Gotcha. Well then a simple plea to give Obamacare a few months and then let us know if you are getting any better service or are paying less welfare to said insurance company.

chezami

None of us peons have any choice, do we?

keddaw

State-mandated insurance, not simply welfare.

It does mean that if you get ill you’ll be covered (for some things), but it does make it more likely you’ll get ill by removing money you might otherwise have spent on (better?) food, housing, heating, clothing etc.

Marthe Lépine

Seems to me some words need to be explained. An “economy” cannot fail, it just exists… It is just the various processes that occur when people exchange goods, services, work, etc. with money or other things as a mode of exchange. An “economic system” can fail. “Economics”, in spite of the best efforts to turn them into a science, are based on observations of people making those exchanges, at various levels, such as between neighbours, between different countries, between governments and people, and so on. From such observations over the centuries, correlations have been made, previsions have been tried to try to see what the future holds, etc. and theories have been devised to try to understand what is going on. And since all that is a matter of human behaviour, it is not really possible to ever draw rock-solid conclusions. And systems, or systematic behaviours, appear on their own, or are planned and implemented in various ways and by various entities, usually governments. My point is that if the current system happened to collapse, it would not necessarily be the end of the world. Nobody is going to come in and seize my landlord’s building or your house because your government has defaulted… Of course there would be some chaos for some time, but maybe out of it a new system will emerge. Maybe some of the people who will suffer could be those whose fortunes are based on paper – fortunes made, for example, through purchasing poor peoples’ or poor countries’ debts and claiming their repayment at exorbitant rates, as Mark showed in an earlier post about cities selling unpaid tax accounts to the highest bidders, or fortunes made by moving paper holdings on various businesses (called shares) back and forth between sellers and buyers in a fashion closely resembling a casino. Maybe some corporations who make large profits doing useless or dangerous things, such as weapons, or stuff to be sold to consumers in larger and larger quantities just to keep the businesses open, will not be able to survive. But maybe, just maybe, newer and more just systems could be devised from the ruins. As long as there is life (human life), there is hope.